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[MOTIVATIONAL MUSIC] - Hi, everyone, Steve Adubato.

This program all about minority businesses, minority-owned businesses, the disparity in the state of New Jersey as to the population of African American, Latino, and Asian business owners and the degree to which they're getting, achieving receiving state contracts, a whole range of issues to be discussed with a very distinguished panel.

Marjorie Perry, who is President, and CEO of MZM Construction and Management Company, also a trustee of the Caucus Educational Corporation, our not-for-profit production company.

Carlos Medina, President of the Statewide Hispanic Chamber of Commerce, New Jersey.

Good to see you, Carlos.

Good to see you, Marjorie.

And finally, Dr. Denise Anderson, CEO of Denise Anderson and Associates, and we'll explain in a moment why she's on.

Dr. Anderson, great to have you as well.

- Good morning all.

Thank you.

- Marjorie, only because you and I have lots of offline conversations about this issue and a range of others, what the heck is the issue?

Why are we dedicating an entire program to this problem that needs a set of solutions?

Please, Marjorie.

- Well, you know, you know what you and I have talked about for the past month is that the big issue is, is that there are state contracts available for minority and local businesses.

The other issue is the barrier to entry to get the state contracts.

So when you have two opposing pieces coming, when Dr. Denise Anderson gets a hold of it, you know, it looks like it's half a percent or 1%, et cetera, because the barrier to entry no one really talks about.

And we have to really think about, outside of the box, how do we take that, partner it up, look at the pain points, and then we can start probably having more Latina and African-American smaller businesses working on state contracts.

- Way to set the tone, Marjorie Perry, our longtime friend, colleague, and trustee.

Now, Dr. Anderson, here we go.

You interpreted these results.

A study was done over, I believe, a 60-month period from 2015, 2020 so far, correct, Doctor?

- Yeah.

- Check these numbers out, and Dr. Anderson will put it in perspective, and then it'll go to our good friend Carlos Medina.

Black-owned businesses in the state of New Jersey represent 9.19 of all available construction businesses.

Based on the study, Black-owned businesses received only 0.14 of the dollars on construction contracts.

Dr. Anderson, how the heck could the results be so abysmal?

- Yeah, Steve, that's a great question.

You know, over this five-year period, and the statistic that you quoted was for construction, but when we look at the three industries that were included in the study, which was construction, professional services, and goods and services, Steve, all together for all three industries for Black-owned businesses, both men and women, we received less than 1%.

- Less than 1%?

- Less than 1%.

- Is it any better for Latino-owned businesses?

- It is not much better.

There probably was one category in the industries where Latino businesses did not have a disparity, one.

- Just one.

Carlos jump in here.

This is why you and your colleagues do what you do every day at the chamber.

Go ahead.

- Yeah, it's frustrating.

We knew what the results would show, but, you know, in a way, kudos to the governor for having the guts to do it and know that the results were gonna be out there 'cause now we have a document.

- Hold on.

Time out, Carlos.

- Yeah, sure.

- When you say the governor did it, what do you mean?

The governor called for this?

- He was able to call for the study.

He paid for the study.

The can's been kicked down the road a couple administrations.

This goes back to McGreevey when GEOD, a small professional service company, sued, saying, "As three white guys, we're being discriminated 'cause guys like Carlos and Marjorie are taking all of that 10% that should go to us."

That was the theory.

And 'cause they didn't do a study, the state knew they were gonna lose in court.

So they entered into a settlement in which they said it's race-neutral.

Now it's just small business.

But as we can see from the numbers, that did not help minority, women, veteran-owned businesses.

It's still the same dismal numbers as you said, Steve.

- Marge, let me come back to you.

Again, not a new problem.

You have been running a successful business for a long time, been at this for a while.

Here's the question.

How the heck have our policymakers, first of all, in the state government, legislators, regulators, others, how has the situation been able to go on for this long and be this terrible?

But at the same time, what would you say to white-owned construction businesses, other businesses, who say, "Hey, wait a minute.

Race/ethnicity should not be a factor in any of these as a criteria for any of these decisions.

It just should be who puts in the best bid, the lowest bid, the best offer, that's it."

Talk to those folks.

A, how the heck did we not make any progress?

B, talk to those folks, please.

- Well, you know, you said a lot Steve as always, so I'm gonna try to encapsulate what you just said.

- Why no progress?

- Number one- - Why no progress?

- So here's the progress that has to happen.

One, you cannot get on a state construction contract without going through Division of Public Works division, period.

That's DPMC.

They're going to vet you to make sure that you can actually do the project.

Number two, when you don't partner, and I've talked about this over and over again, Carlos and I. I've been on panels before.

Partnering has to exist.

- If you have large- - Why?

- Why?

Because it's the scale, and it's also back office support.

- Okay.

- If you don't have a dedicated person working on the forms just for DPMC, forget about what state contracts are.

You're never gonna see them.

They may say, "Okay, well, fine, you only did a compilation.

You didn't do a review in your tax accounting.

You know, you don't have bonding.

You know, well, you have bonding up to $1 million."

Well, then they're gonna maybe give you a category of only $200,000 to do a state contract.

- And so partnering allows for a Black-owned business working with a Latino-owned business to do more than either one could do themselves, Marjorie?

- So in other words, right, so now you have more back office support.

You need the back office support.

You need someone that stays on top of what the state is asking for if you wanna work on state contract.

That's number one.

- Got it.

- So if I were to partner, I have a great partner, happen to be a Latino company here in Newark, we look at who has strengths here and who has strengths there.

So then what we do is take that strength and, hey, you go Marje and focus on this, and Carlos will go focus on the other part of it because it won't work one-off.

If you're a small business, you cannot get there without partnering, being a part of the Hispanic Chamber, being a part of the African American Chamber.

You've gotta have support so that you can get into inner sanctum on how the game is played.

- Okay, so I'm gonna come back to the Black and Hispanic business connection 'cause Marjorie had some pretty powerful quotes about collaboration and why it's been so challenging to date.

But go back to the question of a construction company, a business not minority owned, white male, usually, disproportionately.

Why are we even looking at these issues, Doctor?

And I say why can't we just, who's ever best for the job?

That is a common perception and opinion on the part of a significant number of folks.

Talk to them directly and why the issue's more complex than that.

- Well, yes, Steve, because when you said whoever's best for the job, what we're seeing is is that, you know, there seems to be, you know, preferred, highly utilized contractors.

And so when you're highly utilized, and you know, you do the job, you do the job well, and you know, the state is perhaps looking to bring the same people on that they have the relationships with that can perform.

So it makes it hard for individuals who have not had the opportunity to actually get the opportunity and prove themselves worthy as well.

So that is what this is.

This is about the opportunity for minority and women-owned businesses to do the job and show that they can do the job well.

- Carlos, are we pretty much talking about a closed shop?

I mean, you know, we all know we're in New Jersey.

We know, a closed shop, that this historically been a closed shop.

- It has been.

I mean, new Jersey's big on relationships, Steve.

So folks want the easy route.

So if you work for a county government, and you have a contractor who you enjoy working with, you don't give opportunities to new bidders.

So it becomes generation after generation.

- Is it an old boys network?

- It is.

It is an old boys club.

There's many barriers including insurance and financials that what ends up happening, only large organizations that are international or national.

So we're sending billions of dollars to engineering firms in California.

Let's keep it in New Jersey.

I wanted to bid on something at a public institution, and it's really in my sweet spot, Steve, 80 years' experience.

It went to a firm that was brand new out of another state.

That drives us nuts.

So it's not only the problem of diversity.

It's also the problem by New Jersey.

Keep the money in the state for crying out loud.

- Dr. Anderson, real quick before we go back to Ms. Perry, some of the other key findings of the study over five years, please, Dr. Anderson.

- Yeah, so Steve brought, I mean, Carlos brought up a good point there, is that the study revealed that over 1/3 of state contracts go to out-of-state firms.

And so, you know, we would like to see that capped.

I mean, cap that to at least 10% and require a, you know, good faith effort demonstration that, you know, no New Jersey firm was able to fulfill that need.

- Is that why, Marjorie... Before we go to break, is that why they're going to California and other states?

Because no one in New Jersey could do this work, Marjorie?

- They won the bid.

- So explain to folks who aren't on the inside.

- They won the bid.

- Is winning the bid simply the lowest bid?

- The lowest bid.

Then they were vetted, and then they passed a sniff test, and there's no rules that I've seen that says you have to be in New Jersey.

- Who's doing the sniffing?

Who does the sniffing?

- There's always a commission team, is that right, Carlos?

It's like, so in other words, if it goes into procurement, you know, did they check off this?

Did they check off that?

- This is state government.

This is state government?

- They have to do that.

They do it in county.

They do it in the state because you, if you're not the most responsible bidder, they will go to the next bidder.

- Okay, let's do this.

We're gonna go to a break.

WHen we come back, we're gonna talk about substantive specific recommendations.

We're not gonna solve this problem.

It's taken too many years to get to be where we are, how to make improvements because the results speak for themselves, and they are by any meaningful or reasonable standard abysmal.

Stay with us.

We'll be right back right after this.

To watch more Think Tank with Steve Adubato, find us online and follow us on social media.

- Welcome back, folks.

We're talking about a disparity study that was done over five years.

The State of New Jersey...

The State of New Jersey, Marjorie, did this study?

- Yes.

- Okay.

So Marjorie, I'm gonna read a quote from you.

Alright?

You were talking about partnerships before.

You said, "I just have to say this to our Latino "and African-American crowd."

You were saying this at a public event that was talking about the results of this study.

"We must work together.

"Even if you don't like each other, just do it."

Carlos, what-- (Marjorie & Steve laugh) first of all, I'm gonna find out why Carlos is smiling.

Why did you say that publicly, Marjorie?

And then we'll come back to your colleague, Carlos Medina.

Go ahead, Marjorie.

- You know, and Carlos, and I'm sure Dr. Anderson will back me up, we get so emotional about, "No, no, I can't work with Carlos because I don't like Carlos."

So, people put emotions into business.

I don't understand it.

If it didn't work out, that doesn't mean it's the end of the world.

Move on to the next time, but let's not disparage anyone on what we're trying to do, because people don't like each other.

And if you don't like each other, I've been working in this game for 35 years, and one of the things is that I'm real clear on, I don't like most of the guys I work with.

But I tell you what?

I respect them, and I know I can get the job done, period.

- So Carlos, let me ask you this.

To what extent is Marjorie Perry's comment, her public quote in her explanation right now?

To what, let me play devil's advocate here, to what extent is this a problem that says, "Look," that's about this.

"Well, I'm a black owned business.

"I'm a Hispanic, Latino owned business.

"We're not the same, "so we all have, we have a problem.

"It's a different problem and the same problem.

"But if I partner with you Marjorie, that means I get less."

How much of this is turf?

- Some of it is turf, Steve.

But, I mean, we're working, we're working with a group that's called the New Jersey Diverse Advisory Council.

- You had mentioned that, Carlos.

- Say it again.

Say it again.

We're gonna put up the website.

- It's the New Jersey Diverse Business Advisory Council.

Its goal is to address the issues that came out on the study.

So we've met with the governor's office maybe eight times, they come to meetings when we have our meetings.

And it's members from the African American community, Hispanic, Women, LGBTQ or Pride, and Veterans.

- The Asian community as well?

- Yes, yeah, Indian and Asian community, yes, yeah.

- So it's all about collaborating.

Like Marjorie said, sometimes you collaborate.

You may not exactly get along with that person, but it's business first.

The more bidders and people at a table, the better price the state's gonna realize.

That's the frustrating part when you have one or two bidders, 'cause the way they solicit it might be secretive.

They publish it in a odd newspaper.

There's a lot of games that are played so that bidders are the ones that they want to bid on certain projects.

- Right.

Dr. Anderson, talk about- - But Carlos, wouldn't you also, Steve,- - Go ahead, Marjorie.

- like just say to Carlos, the trust issue.

We don't seem to trust.

That's probably 90% of it, the trust.

And if you don't have the trust- - Hold on a sec, Marjorie, is that any different?

And you've and I have been working together for, let's just say how many blah, blah, blah years.

Okay, so trust, to what degree, and I don't wanna disproportionately focus on race and ethnicity, but do you think there's a unique challenge around trust between African American and Latino owned business leaders, versus other groups?

Do you think there's something unique there?

- Absolutely.

Absolutely.

- You do?

- My Latina colleagues, they stick together.

Period, full stop.

- And the African American business owners?

- Sometimes in the African American community, we kinda like one off.

So we're trying to, and Dr. Anderson talked about it a little bit, is how that trust factor has to grow in our own community.

Because I gotta tell you, I go to any Latino event, I talk to my friends, some of my interns, it's always about familia.

I said that right Carlos?

Familia.

- And- - In Italian, it's La Familia.

But go ahead.

(Marjorie and Steve laugh) - And it's about relationships.

There's a automatic trust.

- Yeah.

- Automatic.

And so what we have to do now, is get better at the trust factors in all minority categories, so that when we do go and play with each other, we're not playing from, "Oh, I don't like them, or I don't have, I have a bias towards them."

I wanna collectively play with them, because I can see where I can go together versus singular.

- Got it.

- And I'd like to add to that if I could.

- Please.

- You know, just to say that I think that that is something that we all can do to work on better, right?

And so when I take a look at what does our social and cultural networks look like?

Oftentimes, they reflect people who look like us in the mirror.

And you know, probably, you know, to a disproportionate amount.

If we're talking about business, it's all about relationships and trust building.

It starts with those social and cultural networks.

When there's an opportunity, and you know that that opportunity is a good fit for someone within your network, you're more likely to reach out to them.

There's already a relationship there.

And so I think the challenge for us all, is to intentionally start to diversify what our social and cultural networks look like, so that we are establishing, and building these relationships, and trust and rapport, so that when opportunity comes, there is someone where there's already this established relationship and trust to partner with.

- Yes.

- Dr. Anderson, you appear to be saying that this is not all on state government, on the procurement process, on the way contracts are awarded.

You're saying part of it needs to be changed there, but part of it is a question of collaboration, partnership, and trusting more on the part of minority owned businesses.

- Minority and non-minority owned businesses, Steve.

Because for the highly- - Explain that part.

- For the highly, right, because for the highly utilized CEO's who are non-minority, again, when they went out to subcontract, you know, could they have subcontract with minority and women business enterprises?

And if we're going back to relationships being the core of that, then they also have some onus to establish those relationships, so that there could be partnering in, or subcontractor opportunities with minority and women business owned enterprises.

- And Dr. Anderson, why is it in there?

And Margie I'll come back to you.

Why is it in the interest of a business owned by someone who's not African American, Latino or Asian, who happens to be a white male, let's say, which is the case in most cases, why is it in their business self-interest?

Dr. Anderson, and then Marjorie, and Carlos.

Go ahead.

- Yeah, absolutely.

Because look at the diversity of our state, of our country, right?

And so if we are customer focused, and if you're in business, you are customer focused.

It is good business to do business with individuals that have representation for the diverse customer base that you serve.

- It's just not the right thing to do, it's the smart business thing to do Marjorie, isn't it?

- Yes.

- Absolutely.

- Marjorie?

- Absolutely.

It's the smart business thing to do.

And, if we're going to talk about solutions here- - Yes, please.

- The more we can, we can help break down the biases between let's say our white colleagues, and our minority businesses.

- What are some of those biases, Marjorie?

Sorry for interrupting.

What are some of them?

- They can't do the job.

They don't have the finances to run the job.

They wanna be paid in 20 days when you might not get paid in 90 days.

So they already have a pre-set disposition in their mind on how this is going to go.

Or, "Okay, well we'll give you $20,000 on a $40 million contract.

And you should be happy, because it now fulfills the minority quota.

So- - I can check off that box.

- I could check off the box.

- But that's not, but that's not real partnership, Marjorie.

- Of course it's not.

But that's why we have the issue we have today.

That's what we're talking about today.

How can we improve that?

Because I can't scale my business, and I'm sure Carlos will speak to this as well, you can't scale if you have transactional work, number one, that's what we're in, we're in the transactional business, and then you can't get enough residual to go to the next level.

So you kind of stay here.

You don't grow.

You stay a boutique business.

You don't become a real scalable business because you can't count on where the work is going to come from.

If you're in an urban area, oh, listen, "Marge, we need you in the urban area."

But if they go to Short Hills, they may never call me.

Same person, same quality of work.

- But you're only useful to certain people in their minds, in certain communities.

- That's exactly right.

- Carlos, jump back in here please.

- It's even more nefarious.

I'm gonna add to what Marjorie said, that example of the $40 million contract.

I have performed contracts that are 20% of the work to be done, and I've paid paid 10%.

So these- - Well how does that... Carlos, Carlos, Carlos, you're doing 20%.

How the heck is, you're contracted to do 20% of the work, a Latino, Hispanic owned business, - Yep.

- but you get paid 10.

How do people get away with that?

They put a black line through the contract through the state of New Jersey with them, and they attach it.

So I have to abide by the rules and covenants in the contract, but they don't want me to know what they were paid.

But it's, you could get that public information, and you calculate what should this be?

So they're adding on almost like a maintenance fee to the state saying, "Well, I gotta manage Marjorie, so give me some extra money."

So it's very, it's a bad situation.

We're pigeonholed into getting crumbs, but then they want you to do more of the work.

- Yes.

- So it's a real bad, it's a bad combination currently.

- We got a couple minutes left.

Dr. Anderson, you did this study, you interpreted the study, you communicated the study.

Well, the state, excuse me, the state did the study, on Dr. Anderson and our colleagues at Denise Anderson & Associates, and interpreted and communicated those results.

How optimistic are you that there'll be substantive, significant improvements slash change, as it relates to the horrific disparity that exists right now?

Dr. Anderson?

- And so, and so, thank you for that.

I mean, we are optimistic, right?

Because we have to be.

Without hope, there's no place to go.

We did receive confirmation that the administration is, you know, - Murphy Administration.

- The Murphy administration is committed to, you know, putting, you know, that nothing was off the table, that they were committed to, you know, revising program parameters, putting forward legislation.

And so, you know, we look forward to seeing what that looks like and building on it.

- Marjorie, is there a leader in the state legislature, who appears to understand and care deeply about these issues?

Because, like Dr. Anderson mentioned, legislation.

Is that coming from an individual legislator or legislators?

- I think the Black Caucus, which is led by Shavonda Sumpter, she's one.

- Yes.

- She gets it.

She really does get it for our Latina and our African business.

- She's from over on Paterson?

- She's in Paterson.

So she knows both cultures, and she's a real, real, real stellar individual on promoting that, pushing that, et cetera.

And I think that you have a few other legislators.

You know, it's interesting.

I'm gonna tell you this quick sort story.

I met with a legislator not too long ago, and what they don't understand is how to execute.

They do policy.

And that's where we get stuck.

'Cause they all write the policy, but nobody knows how to execute.

So that was my little two cents on that.

- Yeah, the devil is in those details.

To Marjorie Perry, to Carlos Medina, and Dr. Denise Anderson, I wanna thank you so much for joining us.

This will not be the last conversation we have around these issues, and we will not simply check off the box.

More to be done.

Thank you so much.

We appreciate it.

- Thank you.

- Thank you.

Thank you, thank you, thank you.

- I'm Steve Adubato.

That is a very distinguished panel.

We'll see you next time.

- [Narrator] Think Tank with Steve Adubato is a production of the Caucus Educational Corporation.

Celebrating 30 years in public broadcasting.

Funding has been provided by New Jersey Institute of Technology.

The New Jersey Economic Development Authority.

Hackensack Meridian Health.

Horizon Blue Cross Blue Shield of New Jersey.

PSEG Foundation.

Valley Bank.

NJM Insurance Group.

The Turrell Fund, a foundation serving children.

And by Robert Wood Johnson Foundation.

Promotional support provided by The New Jersey Business & Industry Association.

And by ROI-NJ.

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